NEW YORK – Talk of more deal-making sent the stock market higher Tuesday, putting the Dow Jones industrial average within close reach of its all-time high.
Reports that retailers Office Depot and OfficeMax are discussing a merger came after big corporate deals for Heinz and Dell were announced in recent weeks. Some investors are betting that more deals could be on the way as buyers pay premium prices for publicly traded firms.
The Dow rose 53.91 points, or 0.4 percent, to close at 14,035.67. All it would take now is one good day to push the average above 14,164, the record high reached in October 2007.
In other trading Tuesday, the Standard & Poor’s 500 index rose 11.15 points, or 0.7 percent, to 1,530.94. The technology-heavy Nasdaq composite gained 21.56 points, or 0.7 percent, to 3,213.59. Google’s stock crossed $800 for the first time.
Markets were also higher in Europe following news that the German economy is picking up steam. Indexes rose more than 1 percent in both Germany and France.
In the U.S., stocks of office supplies stores jumped following a report in the Wall Street Journal that OfficeMax and Office Depot are considering a deal to merge. The paper said an announcement could come as early as this week. OfficeMax soared $2.25 to an even $13, a gain of 21 percent, and Office Depot surged 43 cents to $5.02, up 9 percent. Staples also rose as investors anticipated that more mergers could be on the way.
Analysts cautioned that antitrust regulators could block mergers in the office supply business. Staples, for instance, tried to buy Office Depot in 1997, but was stopped by the Federal Trade Commission.
Health insurers fell after the release of preliminary government data that suggests rate cuts to Medicare Advantage plans for next year will be steeper than anticipated. The two largest Medicare Advantage providers, Humana and UnitedHealth, both sank. Humana had the biggest loss in the S&P 500, dropping 6 percent, or $4.98, to $73.01, while UnitedHealth fell 66 cents to $56.66.